Trademark Trial and Appeal Board
Patent and Trademark Office (P.T.O.)
*1 FIRST NATIONAL BANK OF OMAHA
v.
AUTOTELLER SYSTEMS SERVICE CORPORATION
Cancellation No. 16,121
August 24, 1988
By the Board:
J.E. Rice, R.F. Cissel and E.W. Hanak
Members
First National Bank of Omaha (hereinafter Omaha) petitioned for cancellation of Autoteller Systems Service Corporation's Registration No. 1,292,523, on January 8, 1987. The registered mark [FN1] is shown below.
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The services identified in the registration are establishing and operating electronic automatic teller systems for financial institutions. This mark will hereinafter be referred to as the Autoteller mark.
As grounds for cancellation petitioner asserts prior use and registration [FN2] of the mark shown below
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for banking services. Petitioner contends that the Autoteller mark, as applied to respondent's services, so resembles petitioner's mark as to be likely to cause confusion. Respondent's answer denies that confusion is likely and asserts that petitioner's claim is barred by estoppel, laches, and acquiescence. In a subsequent amended answer respondent claims that petitioner is barred from relying upon its pleaded registration by the doctrine of unclean hands. Respondent alleges in this regard that petitioner made fraudulent statements in an affidavit under Sections 8 and 15 in order to maintain its registration. In the amended answer respondent counterclaims for cancellation of petitioner's registration on the ground of fraud in the Sections 8 and 15 affidavit and on the additional ground that petitioner has abandoned its previously registered mark by not using it since March 31, 1981. The counterclaim asserts that petitioner cannot claim the benefits of use by its alleged licensee, First National Bank of Bethany (hereinafter Bethany) because the mark used by Bethany is not the same mark petitioner asserts as the basis for this cancellation proceeding, i.e., the mark shown in Reg. No. 1,050,266. Moreover, petitioner alleges that even if the license were valid and the mark used by Bethany were petitioner's registered mark, Omaha had already abandoned its mark by then, and, arguendo, had the mark not been abandoned already by then, there has been no monitoring, supervision, or control of Bethany's services rendered under the mark. Respondent asserts that the uncontrolled use by Bethany creates an abandonment by petitioner of any rights which may have been licensed by petitioner to Bethany. Based on these grounds, respndent pleads for cancellation of petitioner's registration as well as dismissal of the petition for cancellation.
Petitioner's answer is basically a denial of the essential allegations of the counterclaim, although petitioner admitted that it had never used the precise mark which Bethany was allowed to continue to use by the agreement with petitioner.
This case now comes up on respondent's motion for summary judgment in its favor on both the petition for cancellation and respondent's counterclaim for cancellation of petitioner's pleaded registration. It is respondent's position that there exist no genuine issues of material fact and that, as a matter of law, respondent is entitled to judgment on both the original claim for cancellation and the counterclaim as well. Petitioner disputes this and asserts that a trial is necessary in order to resolve factual disputes.
*2 The record before us includes the registrations, discovery depositions and responses to interrogatories. Based on this information there is no genuine issue as to the following facts.
Petitioner Omaha first used the mark shown below for banking services in 1975.
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In 1976 it was registered. The particular service Omaha used the mark to identify involved remote access banking terminals. These terminals were located in retail stores in Omaha's trading area. Omaha's customers could access their Omaha accounts through these terminals, which were operated for the customers by the personnel of the various retail establishments. The bank customer did not directly operate the terminals.
By the end of the first quarter of 1981 Omaha had shifted this business to customer-operated automatic teller machines (ATM's) which had by then become readily available and widely used in this industry. The ATM's did not have to be located in stores and operated by store personnel, and their convenience and efficiency made them preferable to both customers and banks. In early 1981 Omaha became part of the "PLUS" system of ATM's, using the mark "PLUS," which was owned by the bank card interchange company which operated the "PLUS" ATM system. When the shift from remote access store terminals was made, Omaha's customers were issued new "PLUS" cards and use of Omaha's registered mark stopped.
Although Omaha had stopped using the registered mark no later than March 31, 1981, it filed an affidavit under Sections 8 and 15 of the Trademark Act in November of that year claiming that the mark shown in the registration was still in use.
In 1982 Autoteller first used its mark in connection with
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establishing and operating ATM systems. In 1984 it was issued a registration by the Patent and Trademark Office.
In the interim, in May of 1983, Omaha became aware of use by Bethany on its bank card of the mark shown below.
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Responsive to receipt of a "cease and desist" letter from Omaha, Bethany entered into negotiations with Omaha in order to avoid threatened litigation and to continue to use the mark it had been using. In September of 1983 the parties executed what was styled as a "license agreement." Under its terms Bethany was granted the right to use Omaha's registered mark in the "ONE CARD format" or the "1 CARD format" shown above, which is the "format" which had been used by Bethany for some time in Oklahoma in connection with banking services. For the right to continue to use its mark Bethany paid $1500. Bethany further agreed to use the mark only in connection with goods and services of the same quality as those on which it was already using the mark. There was no provision in the agreement for Omaha's establishing, monitoring or controlling the quality of Bethany's goods or services rendered under the mark Bethany was using. The agreement between Omaha and Bethany was reached at least thirty months, i.e., two and half years, after Omaha had stopped using its registered mark in favor of the "PLUS" mark for ATM related banking services.
*3 Several years after that, in 1986, Omaha was involved in negotiations with a California company, Onecard International, Inc. (hereinafter "International"). International sought a license to use Omaha's registered mark. International had applied to register [FN3] its own mark, but had been refused registration under Section 2(d) of the act based on Autoteller's registration. International had not used its mark prior to Autoteller's use of its registered mark, but the registration of Omaha indicated that Omaha had priority over Autoteller. International sought to be able, by means of a license from Omaha, to register its mark and resist any potential action by Autoteller to restrict International's planned nationwide use of its mark. International was also concerned that Omaha's "license" with Bethany was silent as to how Omaha was to control the nature and quality of Bethany's services, so International proposed that Omaha amend the Bethany agreement to include appropriate provisions. International's attorney even drafted a proposed contract provision, which Omaha sent to Bethany for approval in November of 1986. Bethany did not respond. There has in fact been no other contact between Omaha and Bethany since the September 1983 "license agreement"--neither a response to the 1986 proposal nor any attempt by Omaha to determine or control the quality of services rendered by Bethany either before or after the agreement.
Shortly after the negotiations with International clarified International's concerns regarding Omaha's agreement with Bethany and Autoteller's use subsequent to Omaha's first use as claimed in its registration, Omaha filed this petition to cancel Autoteller's mark.
In response to Autoteller's motion for summary judgment Omaha does not dispute these facts with either evidence or argument. Omaha contends that genuine issues of fact exist as to its intent to abandon, whether it in fact abandoned its mark, whether Bethany's use of its mark inures to Omaha's benefit, and whether the difference between Omaha's mark and the mark used by Bethany created an abandonment of Omaha's rights in its mark.
We view the issues raised by petitioner as ones of law, rather than fact. There is no dispute as to the facts necessary to make a judgment on the pleaded claims and defenses of the parties to this action. On the undisputed facts as set forth above, respondent, Autoteller, is entitled to judgment in its favor on both the petition to cancel its registration and the counterclaim to cancel Omaha's registration.
The pleaded mark of Omaha was abandoned after Omaha stopped using it in early 1981 with no intent to resume use. Merely not intending to abandon a mark is not enough to sustain rights in it. Although the deposition of Mr. Henry, Omaha's Executive Vice President, makes it clear that petitioner did not intend to abandon the mark, it is equally clear that petitioner had no intent to resume its use at any time in the foreseeable future. Since 1981 there have been no plans and no documents evidencing any plan to use the registered mark for anything, with the exception of the aforementioned "licensing" activities. Nothing in the record shows that stopping use of the mark in 1981 was anything other than a permanent switch from one kind of remote banking, identified by the registered mark, to another kind of remote banking, identified by the "PLUS" mark. Petitioner's intent not to abandon does not maintain its rights in the face of the lack of intent to resume use of the mark. Exxon Corp. v. Humble Exploration Co., 217 USPQ 1200, 5th Cir. (1983). Irrespective of events subsequent to mid-1983, by that time Omaha had abandoned its right to the registered mark through non-use.
*4 The motion for judgment must therefore be granted on the grounds that Omaha has not established that it has rights in the mark which it asserts is a bar under Section 2(d) of the Act to registration of Autoteller's mark. Autoteller's motion for judgment on its counterclaim for cancellation of Omaha's registration is similarly granted, both because of the abandonment and because on the undisputed facts the registered mark of Omaha was not in use when the false claim of use was set forth in the affidavit filed under Sections 8 and 15 in November of 1981.
Abandonment cannot be reversed by subsequent re-adoption of a mark. Omaha's resumption of use in 1983 through Bethany, even if the "license" agreement could be characterized as a valid license to use Omaha's mark, would not have had the effect of reviving Omaha's rights in its mark. The mark had already been abandoned by the time of the Bethany agreement.
Even if it had not, the agreement represents only a consent by Omaha to Bethany's continued use of the mark Bethany had been using, rather than a valid license for Bethany to use Omaha's registered mark. Aside therefrom, the agreement fails on other grounds, for the same reason that concerned International in 1986: control.
It is well established that permitting others to use one's mark without retaining control over the nature and quality of the goods or services produced under the mark works an abandonment of the mark. Omaha neither established a quality standard nor took any action to ensure that Bethany measured up to it. Although the agreement holds Bethany to maintenance of whatever quality service standards it had already established, there was no specific understanding of what this standard was. There was no attempt made to define the standard and no monitoring to ensure that it was met. It was a naked license at best. Omaha in effect gave Bethany its consent to continue use of the mark Bethany had been using. Bethany bought the right to be left alone, without having to deal with Omaha further, and Bethany never again communicated with Omaha. To characterize this agreement as a valid license to use Omaha's registered mark would be unjustified in light of the undisputed facts.
In summary, petitioner abandoned its registered mark when it stopped using it in early 1981 without intent to resume use. The affidavit filed under Sections 8 and 15 was a false claim of continued use. Petitioner's rights were not revived two and a half years after it stopped using the mark by the agreement with Bethany. Too much time had already passed without use or intent to resume and the agreement was not a valid license anyway. Apart from the issue of whether the agreement permitted use by Bethany of Omaha's mark, the agreement had no clear provision for Omaha to monitor or control the quality of Bethany's services rendered under the mark. The facts that Bethany has not even communicated with Omaha subsequent to the agreement and that Omaha has neither established nor enforced quality standards establish that the 1983 agreement was not a valid license agreement by which Omaha can claim continued use of its mark through Bethany. Besides this use of Bethany's mark there is nothing that is even argued to be evidence of Omaha's intent to resume use of its mark after 1981. The 1986 attempt to reach a license agreement with International neither bore fruit nor occurred soon enough after Omaha stopped using the mark in 1981 to keep Omaha's rights alive.
*5 Accordingly, the petition to cancel Autoteller's registration, Reg. No. 1.292,523, is dismissed. The counterclaim to cancel Omaha's registration, Reg. No. 1.050,266, is granted.
J. E. Rice
R. F. Cissel
E. W. Hanak
Members, Trademark Trial and Appeal Board
FN1. The registration issued to Autoteller Systems Service Corporation on August 28, 1984. Use since April 7, 1982 is claimed.
FN2. Reg. No. 1,050,266 issued Oct. 12, 1976, claiming first use July 15, 1975.
FN3. S.N. 441,936